Earlier this year, 38 Planned Parenthood subsidiaries in the United States received over $ 80 million in loans from the Federal Paycheck Protection Program (PPP). Now, the Small Business Administration (SBA) pressures these affiliates to repay the loans, arguing that they were ineligible in the first place.
The loans, which were provided as part of a program designed to help small employers continue to pay their staff during the economic crisis due to the coronavirus pandemic, were critical to the clinics they received, Planned representatives say Parenthood.
In normal times, the clinics offer reproductive health services, from STD tests to contraception counseling to abortion. But with the coronavirus spreading across the country, clinics have had to divide appointments, convert some in-person visits into phone calls, and cancel fundraisers, causing a drop in sales, Stephanie Fraim, the director of Planned Parenthood of Southwest and Central Florida Vox said.
Thanks to the PPP loan, she was able to keep all her staff working and start a tele-health program to offer, among other things, hormone therapy prescriptions for gender-affirming care. “Not only did we not fire anyone, that meant healthcare was delivered to many patients,” said Fraim.
The SBA wants Planned Parenthood partners like Fraim’s to repay their PPP loans because the clinics overseen by the nationwide Planned Parenthood Federation of America, which has more than 500 employees, are not eligible for a loan program intended for smaller employers. Under this pressure from the SBA, Republicans in Congress are calling on the Department of Justice to investigate whether Planned Parenthood committed fraud by applying for the loans.
The affiliates, meanwhile, claim that their leadership and finances are separate from the nationwide group – and other local affiliates of national nonprofits, such as the YMCA, have received no PPP loans. Planned Parenthood partners say they are chosen by the Trump administration because some of their clinics offer abortions, although the PPP money cannot be used to pay for them.
“This is clearly a target,” said Fraim.
Many Democrats in Congress agree 41 senators send a letter to the SBA on Friday urging the agency not to target PPP recipients for political reasons.
The Trump administration has worked for a long time strip funding from Planned Parenthood – for example, a new rule regulating Title X’s family planning funds forced the group to quit that program. And when the coronavirus pandemic hit, some feared that the government would use the crisis to continue its attacks on the group.
The SBA claims that it only enforces eligibility requirements when it comes to PPP funds. But according to the partners involved, that’s not what happens. “This is so clearly another attack on Planned Parenthood and our healthcare and the patients we serve,” said Fraim.
The Small Business Administration says that the structure of Planned Parenthood affiliates is not eligible for PPP loans
Planned Parenthood operates on an affiliate model, which means that local groups such as Planned Parenthood of Southwest and Central Florida are separate nonprofits from the national Planned Parenthood Federation of America, which sets some general standards for the Planned Parenthood brand. The national organization has not applied for a PPP loan, but many smaller, local affiliates have applied for and received it.
In mid-May, the SBA began sending letters to affiliates instructing them to return the money. The letters, obtained by NPR, say that “PPFA is known and has control over its local affiliates”, and that the affiliates “in the nationwide PPFA network led by PPFA on a number of management issues” do not qualify them for PPP loans.
The letters also state that if borrowers knowingly make false statements in a PPP application, the SBA can refer them “for appropriate civil or criminal penalties”.
Meanwhile, on May 21, 26 Republican Senators sent a letter to Attorney General William Barr asking him to investigate the affiliates fraudulently applying for the loans, as CBS News Releases. The affiliates “requested and received approximately $ 80 million in loans from the Paycheck Protection Program, despite the fact that they were not eligible for such loans,” the letter said.
However, the affiliates state that they are eligible for the PPP loans, since they are separate from the national PPFA organization.
“I’m a separate 501 (c) (3),” Fraim told Vox. “I file separate taxes – the IRS certainly understands that.” She also notes that her affiliate and others have separate boards of directors of the national group, with their own recruiting and dismissal powers.
Fraim knew that Planned Parenthood would likely gain another level of government control when they applied, so her team would read the PPP application criteria very carefully, she said. “It was crystal clear that we had qualified.”
Planned Parenthood’s partner structure is similar to other nonprofits, such as the United Way, she added, noting that these groups have not been asked to repay their PPP loans.
SBA press director Carol Wilkerson said in response to an investigation by Vox that the agency does not comment on individual borrowers.
According to Planned Parenthood, the SBA’s decision is politically motivated
In part because other similarly structured organizations have not received calls to repay their loans, both the local affiliates and the national Planned Parenthood organization believe that the SBA letters and calls from Republican senators are motivated by politics. But it’s also because the Trump administration and Republicans in Congress have usually tried to withdraw the group’s federal funding because it offers abortions. Long before the new Title X rules were introduced, Congress Republicans – including now Vice President Mike Pence – proposed bills to reduce funding for Planned Parenthood. And President Donald Trump anti-abortion activists have said, “Unborn children have never had a stronger defender in the White House.”
However, PPP funds have a limited scope. They are primarily intended to cover the costs of payroll, rent and utilities. This, combined with the fact that the Hyde amendment prohibits the use of federal funds for abortion, means that PPP funds have not been used for abortion procedures. Still, efforts to get affiliated companies to regain their PPP resources are an attempt to weaken the group and reduce access to long-term abortion care, Planned Parenthood and its supporters believe.
“This is an informed strategy by Trump and his allies in the Senate to exploit a public health crisis to eradicate essential reproductive health care, including abortion access and STD testing and treatment,” said Jenny Lawson, Planned Executive Director Parenthood Votes, in a statement on May 22.
Democrats in Congress are now appeal to the SBA reconsider. “It is critical that the SBA implement the PPP as conferred by Congress without ideological efforts to treat some nonprofit differently from others,” Senate Secretary of State Chuck Schumer (D-NY) and 40 other senators enrolled in a letter of May 23.
To the SBA:
In the CARES Act, the PPP program ensured that non-profit organizations that met the qualifications would be eligible for aid.
You must stop the ideologically driven action against Planned Parenthood’s local health centers to score political points for the Trump administrator. pic.twitter.com/rv8Cxkwl8T
– Chuck Schumer (@SenSchumer) May 23, 2020
Some Republicans in Congress believe that Planned Parenthood partners should be compared to other large organizations that have repaid PPP funds in recent weeks.
“That’s what the Los Angeles Lakers have done. That’s what Shake Shack did “, Senator James Lankford (R-OK) NPR said. “So other organizations that were revealed not to have taken the money have returned the money, so that would be reasonable for them.”
However, given the Trump administration’s history with Planned Parenthood, many were concerned that it could discriminate against the group during the pandemic. For example, Mary Alice Carter, a senior advisor to the reproductive health watchdog group Equity Forward, asked in a February interview with Vox whether the Trump administration would refuse to ship coronavirus testing kits to Planned Parenthood facilities.
Now, Planned Parenthood partners believe the Trump administration has found another way to continue a campaign against the group, at a time when stakes may be higher than ever.
“This is a pattern we’ve seen before,” said Fraim. “I never thought they would drop so low that they would do it during a pandemic, while we should honestly take care of our community.”